[Temperature Check] Create the Uniswap Foundation

Temperature Check
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Re: UGP. Thank you for the comments here! (For others: Ken and I are also writing up some additional history and information about UGP to add as a comment in the forum later today and to the addendum in the next version of the proposal!)

Re: governance. Agree! And a proposed governance process revamp is definitely in scope for our first 3 months (inspired by this post, with additional community feedback)

I’ll publish answers to the rest of your questions in line:

  1. The biggest thing that stood out to me was 35% for research on incentive mechanisms.
  • Can you guys go into more detail on what you hope to achieve there and maybe give some more detailed examples of the types of things you want to explore using this funding?
    • Yes! The goal here is to fund MVPs of incentive mechanisms which work to achieve one or all of the goals of growth, sustainability, and decentralization of the Uniswap Protocol - primarily by increasing engagement and retention across a variety of stakeholder groups. Many protocols have experimented with liquidity mining and that could be in scope here, but there are also opportunities to explore other kinds of incentive programs. One example is a developer mining program, which would incentivize third-party integrations with the protocol to strengthen its network effects.
  • Will UF be using funding to provide actual incentives (i.e. some types of liquidity mining programs)?
    • Yes. That’s one of the reasons this is the largest bucket. The $21M (35% * $60M) would fund MVPs. If the MVPs are successful, grantees could take their learnings and propose a larger scale initiative to the community to be funded by the Treasury.
  • If the answer to the above is yes, what kinds of modeling will you be doing to before funding a given incentive mechanism MVP and will you plan to share the results of modeling with the community?
    • We have a 5% Incentive Program R&D grantee budget that would fund this kind of research and modeling. While we will work with grantees to determine the best modeling for a specific program, one example might include an estimation of marginal swapper, or marginal $1M of volume, benefit to Protocol network effects. In other words, how much additional TVL does one additional swapper prompt, what is that TVL’s impact on reduced slippage, how many additional swappers does that attract? This research, like all other research funded by grants, would be open sourced to the community.
  • Given that this is the largest part of grants budget, would it be fair to say that the UF thinks incentive scheme development is the largest factor in the future growth of the Uniswap protocol?
    • The most important input to the future growth and sustainability of the protocol is stakeholder growth, usage, and engagement — essentially, making it easier for the community to get involved. Incentive programs which reward Protocol contributors with UNI might not only bring new integrations, but also turn contributors into governors of the Protocol (a lockup could be a component of these programs). Because the success of one or multiple programs like this would potentially provide long term sustainability and growth for the Protocol outside of any one or set of external actors or interfaces, we believe it is an integral component of our budget and key to Protocol success.
  1. What types of candidates are you seeking for 3rd board member?
    1. Based on our experiences over the past few weeks, we’re seeking out an individual with a few characteristics. Most importantly, they should have 1) significant experience in crypto, and 2) a Founder mindset. Based on what we have seen thus far, we also would look for someone with 3) a law degree and experience working as a lawyer, to provide guidance to the Foundation on the evolving legal and regulatory landscape, and 4) previous Board experience particularly for an organization focused on open source software, technological infrastructure, and/or financial services. However, we believe we will learn a lot if and when the UF gets fully up and running and we begin to conduct Board interviews, and these criteria may change as a result.
  2. Is the advisory team permanent or will it roll over periodically as in the current UGP?
    1. Intend to keep working with the advisory team for as long as their contributions are valuable to the UF - which we forsee as being a long time! In the event of unexpected circumstances or advisors no longer being able to make a time commitment, we would seek to replace them with someone of equally high caliber. Also worth mentioning that we are not necessarily capping advisors at 4 and may add more over time as is helpful.
  3. Now that Uniswap labs has entered the NFT space via acquisition, will NFT focused tech be eligible for UF grants?
    1. UGP is open to any grantee project which benefits the Uniswap Protocol or ecosystem. If an NFT focused grant falls into that category, then definitely! Caravan is one cool example that came out of the Unicode Hackathon, it allows users to rent Uniswap v3 liquidity (NFTs) from one another.
    2. Also worth noting that the Uniswap Labs acquisition of Genie has no impact on the Uniswap Protocol, governance, or UNI token (covered in their blog post).

A suggestion:

I think the marketing and events budget looks low. I would like to see the Uniswap protocol begin to market itself in a big way. FTX is out here naming stadiums, but Uniswap logo, branding, mission and ethos is cooler in every way and I think has the potential to resonate with retail. Superbowl commercials. Official sponsor of Paris Fashion week. Headline sponsor of US womens soccer. The olympics. More e-sports partnerships. I would add another $10M to the first year’s budget to test out large scale sponsorships and see if they work for us.

  • I like this! We do have a 10% grants allocation for community growth ($6M with current budget) which will include sponsorships. Community - what do you think?